"If you can't understand how a business makes money, then you should not invest in it." - Shearn

After reading through the business section of the 10K, visiting the company website, and listening to earnings calls, you should have a good idea of how the business makes money.

Shearn recommends using this information and putting it into your own words. It's essential to do the work to understand where the earnings are coming from and avoid making assumptions.

Also, keep in mind that businesses change and evolve. By listening to management and staying up to date, you can be aware of potential changes to the revenue model and make the appropriate decisions if necessary.

• *Notes are from "The Investment Checklist" by Michael Shearn -Question 4 of "Understanding the Business - The Basics."